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Mayday marchers demonstrate trends in Panama's labor movement
Cement wars
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Cement wars

by Eric Jackson

Panama has a cement shortage, largely caused by a boom in the construction of luxury housing and upscale shopping areas in Panama City. How viable that might be in the long run is the subject of intense interest in many circles, with some people in the real estate and construction business warning that most of the buyers are Colombian, European or to a lesser extent North American speculators who don't actually intend to live in the apartments they are buying but are counting on selling them at higher prices in the short-term future. But even so, we have a canal expansion project coming, so there is little expectation of any reduction in the demand for cement. The shortage has become so acute that in parts of the Interior home building has been slowed because the needed cement is just not available, while on Colon's Costa Arriba a sack of cement now costs around $10.

A good time to get into the cement business? Maybe so, but then to do so here would be to take on two entrenched oligarchs, Cemento Panama and CEMEX, the former a home-grown monopoly that the Omar Torrijos dictatorship in its time thought it would bring down to size via the state-owned Cemento Bayano, the latter a major world contender owned by Mexico's Zambrano family, which moved into Panama in a big way by the purchase of Cemento Bayano in a 1990s privatization sale. They won't say it as such, but neither of these companies can be expected to be very enthusiastic about sharing the coming canal construction bonanza with an upstart.

Ah, but the Parque Industrial Maritimo SA (PIMPSA, as ironic as the name may seem to English readers) has the former US Navy fuel tank farm in Arraijan and associated facilities in Rodman, at the entrance to the Panama Canal. PIMPSA got its current holdings by buying out Alireza Mobil during the Moscoso administration, after the Mireyistas acted in many ways to harrass the Saudi-owned company and ultimately oblige them to sell. The confluence of big business and political intrigue is nothing new for PIMPSA.

And what better way to steal a march on the big guys than building a cement plant at Rodman, much closer to the Pacific side locks construction site than any CEMEX or Cemento Panama facility? That location would give them the lower transportation costs to have a chance bidding against the big guys. They proposed to install a clinker milling plant at Rodman.

Clinker is the glassy residue from burning coal or a mixture of limestone and various rocks, clays or ores, which is then powdered and mixed with a little bit of powdered gypsum to create cement. Cement is then mixed with sand, gravel and water to make concrete.

The milling of clinker is, as any resident of Colon province's correigimiento of San Juan can tell you, an amazingly dirty industry. Asthma, silicosis and other respiratory diseases are prevalent there, around the Cemento Panama plant. But older observers will also know that it can be cleaner or dirtier --- after many years of the plant's polluting at will civic and governmental pressures were brought to bear and the company eventually installed expensive anti-pollution equipment and just driving by now, as compared to doing so 15 years ago, the covering of dust on all the homes, trees, cars and so on is visibly reduced. The problems, however, have not entirely gone away. Theoretically you could run an industry that produces huge quantities of fine abrasive powder without any emissions, but the costs of that would run very high. Nobody has tried this in the Panamanian cement industry.

PIMPSA said that it would, and submitted an environmental impact statement to the National Environmental Authority (ANAM) flatly promising zero emissions. The pricetag on this facility was put at $20 million.

ANAM rejected PIMPSA's first application, which was long on promises, short on detail and without convincing scientific substantiation. Meanwhile, people who have invested in tourist-related businesses not far away on the Amador Causeway and on the opposite west bank of the canal entrance began to object to the plant. So did a coalition of environmentalists.

There has ensued a publicity war. PIMPSA took out full-page newspaper ads that pointed to clinker milling plants in Spain that it claimed were zero polluting and located near residential or tourist areas. ANAM director Ligia Castro, in Madrid on other business, drove by one such plant and said she couldn't see any powder. But environmentalists also mobilized, putting up signs opposing the plant in residential neighborhoods, holding press conferences, writing letters to the editor. Adding to those efforts, opposition legislator Leopoldo Benedetti (Union Patriotica - Colon) took out full-page ads of his own, challenging the claims in PIMPSA's ads point by point.

It turns out that many of the claims in the PIMPSA ads were inaccurate, and the central fallacy was that in Spain the low-pollution clinker plants were still dirty enough not to be tolerable close to sensitive areas, and the pollution controls on those facilities drove their prices to more than double what PIMPSA originally said it would spend at Rodman.

PIMPSA has since raised the cost estimate on its proposed Rodman plant from $20 million to $43 million.

As this story was written PIMPSA had a motion for reconsideration of its application pending before ANAM.

And the would-be competition? CEMEX and Cemento Panama aren't saying things good or bad about PIMPSA. They are, however, spending more than they usually do on publicity portraying themselves as good corporate citizens and clean neighbors.

Mayday marchers demonstrate trends in Panama's labor movement
Cement wars
The Panama News readership figures

Free Trade Agreement maneuvering in Washington
Business & Economy Briefs